Pinterest Takes on Google and Facebook With Self-Service Ads

Pinterest operations head Don Faul, a former Facebook and Google executive

Pinterest

Pinterest is rolling out a marketing tool that could help it take ad dollars from Google and Facebook.

A new advertising system will let marketers bid to display “promoted pin” messages on Pinterest, said Don Faul, the company’s head of operations. Unlike the display ads Pinterest has started selling to larger brand advertisers based on a cost per thousand viewers, the new self-service system is geared toward smaller businesses who will pay every time someone clicks on an ad.

A few brands, including Vineyard Vines and Shutterfly, have already tested the cost-per-click ads, which will be available to a broader group of marketers this month, Faul said.

Pinterest is taking a page from larger Internet giants, which generate billions of dollars from ad platforms aimed at small- and medium-sized businesses. Leading the initiative is Faul, who helped launch Facebook’s self-service ads in 2008, and prior to that managed online ad sales at Google.

Because users of Pinterest are often planning vacations, home improvements and other projects that involve making purchases, the ads could be even more effective than those on other sites, Faul said.

“People use Pinterest when they are thinking or dreaming about the future,” he said. “They’ve declared an intent” that could eventually lead to a purchase, he said.

Pinterest will let marketers bid to have their ad appear next to the results of a search, or within a category of content on its site, such as home décor or men’s fashion.

The four-year-old company began generating its first revenue this year, its first steps toward becoming a viable business. Pinterest was valued at $5 billion in a funding round last month, making it one of the most valuable venture-capital backed startups in the world.